Piper Jaffray Raises Price target on Mattel (MAT) After Disney Savings Help Drive 4Q EPS
Piper Jaffray reiterated a Neutral rating on Mattel Inc. (NASDAQ: MAT), and raised the price target to $26.00 (from $22.00), following the company's 4Q earnings report. MAT reported adjusted Q4 EPS of $0.63 vs. the Street at $0.61. The upside came largely from a cut in trade spend for Disney Princesses as the company undersold inventory to minimize overhang into 2016.
Analyst Stephanie Wissink commented, "We are maintaining our Neutral rating, seeing shares as fairly valued exiting the Q4 report. At first glance, the report was better than feared and Barbie’s gain was a function in part of reduced sales of other doll brands. The upside to EPS came largely from minimal trade spend on the Disney business. The outlook for 2016 was inline with our expectations, with sales down L/MSD and cost savings helping to preserve a portion but not all of EPS. We are encouraged by growth commentary into 2017 and a multi-year recovery potential. That said, the set-up allows for little wiggle in terms of execution, and we recognize that recoveries are typically choppy in nature. We still see $2 in 2020 EPS as a reasonable assumption. Our PT moves up from $22 to $26 on 18x FY17E EPS."
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Shares of Mattel Inc. closed at $26.76 yesterday.